SunSirs: Weak and Downward Market Situation of China SBR

Recently (1.5-1.21), the SBR market has been weak and declining. According to the Commodity Market Analysis System of SunSirs, as of January 21st, the price of SBR in the East China market was 12,175 RMB/ton, a decrease of 1.68% from 12,383 RMB/ton on the 5th. In early January, the butadiene benzene unit of Qilu Petrochemical gradually resumed normal operation, with a slight increase in the supply of butadiene; The market is resistant to high priced goods, and the ex factory price of SBR has been slightly reduced by 200 RMB/ton. According to the Commodity Market Analysis System of SunSirs, as of January 21st, the factory price of Qilu Butylbenzene 1502 from Sinopec North China Sales Company was 12,000 RMB/ton; Downstream tire production has increased compared to the post holiday period, and there is some support for demand for SBR; The price of raw materials has risen, and the cost of SBR has slightly increased. The overall market volatility and consolidation are the main factors, with the mainstream reports of the SBR markets in Fushun, Jihua, and Yangzi in East China around 12,100-12,400 RMB/ton as of the 21st.

Recently (1.5-1.21), the prices of raw materials butadiene and styrene have risen, and the cost support for SBR has strengthened. According to the Commodity Market Analysis System of SunSirs, as of January 21st, the price of butadiene was 9,146 RMB/ton, an increase of 4.53% from 8,750 RMB/ton on the 5th; As of January 21st, the price of styrene was 8,680 RMB/ton, an increase of 2.00% from 8,510 RMB/ton on the 5th.

Recently (1.5-1.21), the overall construction of domestic SBR plants has been stable. At the end of January, Yibang plans to shut down the 100,000 ton/year SBR plant for maintenance, and the supply of SBR is expected to slightly tighten in the future.

Demand side: Downstream tire companies have partially restarted their maintenance equipment, resulting in an increase in tire production. It is understood that as of mid January 2023, the operating load of all steel tires in rubber tire enterprises in Shandong region is around 5.9%; The operating load of semi steel tires in domestic rubber tire enterprises is around 7.2%.

SunSirs analysts believe that the cost of SBR is supported, and the supply of SBR is expected to slightly decrease in the later stage. However, downstream tire production is expected to significantly decrease near the end of the Spring Festival. Overall, it is expected that the SBR market will be weak and volatile in the later stage.

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